Why building a good culture should be on top of the agenda of every CEO

In March 2009, I graduated from university and started my professional career – first as an economic advisor and later (following “the call”) as a consultant helping organizations through difficult transitions. Being a natural born consultant from day one, I couldn’t help but notice the countless situations, in which teams and organisations were only able to deliver mediocre results, despite the enormous individual skills and potential present in the room. In some organisations this was the normal state, accepted by everyone as “that’s just how things are”. Along with that, substantial frustration would be felt at all levels, more often than not causing the organisations to fail its goals and encourage skilled people to leave. Almost in every case, unclear goals, roles or processes were not the real issue. Some organisations even were masters in defining these organisational pillars. In fact, perception, interaction and behaviour of people turned out to be the limiting factor. In other words: Culture.

Why do organisations seem to struggle with cultural development?

When asked about their biggest challenges in a complex, rapidly changing environment, senior leaders across countries and industries state the same core issues in different variations:

  • We need to become more innovative and meet changing demands.
  • We need to boost our speed and productivity.
  • We need to attract the best people.

What I find striking about these answers is the fact that first, behind every single of these challenges there are at least 10 more, related to cultural issues; and second, that despite this, cultural change still ranks too low on the priority list of most CEOs. Often, it is not even on that list, left to HR to handle it among many other “human” issues. Here is why this kind of strategy is very problematic on the quest to tackle the biggest issues of all organisations.

Innovation is achieved by setting up diverse teams and creating the right environment for people to unfold their creativity. But getting people from different departments, of different age and with different backgrounds in the same room with colourful furniture and tons of sticky notes and LEGO-bricks for a 2-day design thinking workshop is not enough. It’s fun and some good ideas may come out of it, but it won’t solve deep underlying issues that prevent people from developing and sharing bold ideas and the organisation from putting the best ideas to work.

There are enough tools and methods to streamline productivity and increase agility and speed to keep an organisation busy with implementing them for decades. But it’s not enough to crowd the office with SCRUM-Masters and Six Sigma Blackbelts and let them run Sprints, manage projects and communicate via Slack, Basecamp, Asana, Monday, Trello or whatever the technological platform of the day is. Recently, companies have even discovered self-awareness as a tool for increasing productivity. Mindfulness programmes are on the rise everywhere - from start ups to large corporations, hoping to increase the productivity of the employees by making them meditate for more resilience, motivation, and better sleep. This development might be well-intended, but it is also dangerous as it fails to acknowledge the fact that 1) real, honest, radical self-inquiry is hard work, going along with deep changes at the personal level and needs to be accompanied by a skillful expert in order not to cause harm; and 2) that higher self-awareness of individuals will only generate better results for the company, if the organization is able to supply the space for the self-aware employee to unfold his or her potential.

Attracting the best people is key for the success of organizations. This is a no-brainer, as people’s skills and weaknesses and the way they interact with each other compile to define the skills and weaknesses of teams and organisations. Take a good process and leave it to the hands of unskilled people. You get the point. But it’s not enough to ask HR to assemble an annual training programme as thick as a book, bolster up the employer branding using social media and celebrate the occasional “Employer of the year”-Award. What surprises me is the persistence with which many organisations fail to define what “best people” in terms of skillsets really means for them against the VUCA-context and which cultural environment is needed for the skills of these people to unfold, develop and contribute to the success of the organisation.

Moreover, with freelance experts from different backgrounds coming together to work and decide(!) on timely limited projects for companies becoming the new normal, setting up an environment to allow teams assembled like this to onboard, align decisions with the goals of the company and achieve a state of flow very fast will decide over success or failure of projects of all sizes.

According to a survey made by researcher Brené Brown, the behaviours and cultural issues that leaders identified as getting in the way of their organizations across the world include

  1. Avoiding tough conversations, including giving honest, productive feedback.
  2. Diminishing trust caused by a lack of connection and empathy.
  3. People not sharing their ideas for fear of failing, fear of being put down or ridiculed.
  4. Too much shame and blame, not enough accountability and learning.
  5. Not enough time spent on problem identification resulting in fixing the wrong things.
  6. Unclear organizational values assessed in terms of aspirations rather than actual behaviours that can be taught, measured, and evaluated.

These findings very clearly outline the room for action. It is not only goals, roles and processes that organisations should deal with. It is people. The organisational culture, consisting of the shared values, customs of communication, rituals in meetings, guiding rules for behaviours in different situations and the narrative about the organisation, is such a central part - the heart – of every organisation, that improving it should be an integral part of every strategy and every change process.

Considering its benefits, why does cultural change still run under AOB?

The answer is: because of the very persisting myths on cultural change still taught in management schools and practiced by generations of leaders around the globe.

Myth #1: Organisational culture is about people, and all people-related (aka soft and messy) topics are HR-topics.

Myth #2: Cultural change consumes too much time and resources with an uncertain outcome.

Myth #3: The effects of cultural change cannot be exactly measured and evaluated. In KPI-driven organisations with acknowledgement being given based only on hard facts and figures, it doesn’t pay off to invest in “soft topics” like cultural change.

In fact, what all these myths are saying, is, it doesn’t pay off to seriously invest in building better culture. We can do a bit here and there and it should be enough. This might have been true in the 20th century, when innovation meant building a better product with a couple of new features. In the 21st century, with innovation meaning developing whole new business models and taking a deep dive into empathy with the customer, it is not. Modern cultural strategy is a breathing one, allowing for different environments and leading styles to emerge when needed to achieve diverse goals. For example, according to Erin Meyer, professor and expert in multicultural management, in terms of multicultural teams working together, if the goal is innovation or creativity, the more cultural diversity the better, as long as the process is managed carefully. If the goal is simple speed and efficiency, then monocultural is better than multicultural. And of course, empathy-driven innovation processes function much better if practicing empathy and sharing bold ideas is a behaviour strongly supported by the underlying culture.

The bottom line is this: Today, it is vital for leaders to recognize that it is people who fuel the success of organisations but only if there is a cultural environment matching the individual goals and challenges of the organisation where their people can do their best work. They need to set their teams up for success. A good first step is assessing where your organisational culture is right now and what keeps it from delivering the best results. Then, courageously start from there. In the end, it’s not rocket science and well-directed investment in culture inevitably returns substantial and sustainable value.

Elisaveta Gomann

Co-Founder, Head Executive Coach. Coacht Führungskräfte, entwickelt Teams, spürt Innovationen in Coaching und Beratung auf, supervidiert und trainiert Coaches, ermöglicht Potentialentfaltung und Fortschritt, liebt Podcasts.